The giants of the internet cut poor figures this week as they pleaded with irate (and egotistical) Congressmen to continue their collaboration with China’s official censors. Meanwhile, in China, the Communist Party was haggling over the fate of a feisty newspaper that had proven too outspoken for its taste.

There are few indications that the four companies under scrutiny — Google, Yahoo!, Microsoft and Cisco Systems — put up much resistance to the demands made of them by the Chinese, or weighed with sufficient care the money that they hope to make in China’s fast-expanding information market against the priceless asset of reputation. Corporations whose business is the free flow of information should not lightly collude in measures designed to block the access of consumers to their product. And that is particularly so when Chinese officials themselves are debating the boundaries of information.

Google argues that the Chinese are, on balance, better off with an efficient, albeit censored, China-registered Google portal than they are pitting their wits against the Chinese firewalls encircling international Google.com. Thankfully, China’s 111 million internet users are becoming daily more expert at outflanking the censors, so the restrictions placed on search will be limited in their impact. At the very least, the “health warnings” posted on Google’s China site do at least have the merit of transparency.

Yahoo!, by contrast, struck furtive and shameful bargains with the Chinese authorities for which there is no defence. Faced with Chinese requests for e-mail evidence that was used to convict a journalist and, reportedly, one of China’s democracy campaigners, the company could have objected that this content was outside Chinese jurisdiction. It could simply have said that it could not trace the e-mails in question. It did neither and furnished Chinese authorities with the personal information that they demanded.

China’s censorship methods have come under intense scrutiny abroad just when last month’s clumsy decision to suspend Freezing Point, a remarkably outspoken weekly offshoot of the official China Youth Daily, has provoked unusually open criticism within the Communist Party itself. The editor, Li Datong, enlisted senior party members to resist the decision — and circulated, on the internet, a denunciation of the propaganda department for unlawful abuse of power.

The ban was lifted yesterday, but Mr Li and his deputy have been shunted ignominiously aside. The reissued paper is likely to be a timid shadow of its old self. Yet the battle now joined will not end, because it is part of a wider Chinese debate about the role of free expression, as political safety valve and as the handmaid of innovation, personal and economic. The leadership is torn between intolerance of dissent and the need to nurture open minds. Unless this argument is resolved in favour of freedom, China risks losing out to societies that, being more open, are better able to grasp the opportunities of the information age.